Market abuse prohibitions

Certain types of behaviour, such as Insider trading and Market manipulation (including attempted market manipulation), can amount to market abuse. REMIT aims to reduce instances of market abuse and as a result protect the integrity of electricity and gas markets and increase consumer confidence. Types of conduct constituting market abuse are prohibited as set out in Articles 3 and 5 of REMIT. The following seven types of behaviour may amount to market abuse. The first three of them constitute insider trading, the last four constitute market manipulation, including attempted market manipulation:

Insider trading:

1. Insider trading – when an insider trades, or tries to trade, in wholesale energy products on the basis of inside information relating to that wholesale energy product, Article 3(1)(a) of REMIT. The Agency considers that the market participant holding inside information is also obliged to refrain from any amendment or selective withdrawal of the order placed (“hands-off approach”) in order to comply with the prohibition of insider trading.

2. Improper disclosure of inside information – where an insider improperly discloses inside information to another person, unless such disclosure is made in the normal course of the exercise of their employment, profession or duties, Article 3(1)(b) of REMIT.

3. Recommending on the basis of inside information - where an insider is recommending or inducing, on the basis of inside information, another person to acquire or dispose of wholesale energy products to which that information relates, Article 3(1)(c) of REMIT.

Market manipulation (including attempted market manipulation):

4. False/misleading transactions - trading, or placing orders to trade, which gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of wholesale energy products, Article 2(2)(a)(i) and (3)(a)(i) of REMIT.

5. Price positioning - trading, or placing orders to trade, which secures or attempts to secure, by a person, or persons acting in collaboration, the price of one or several wholesale energy products at an artificial level, unless the person who entered into the transaction or issued the order to trade establishes that his reasons for doing so are legitimate and that that transaction or order to trade conforms to accepted market practices on the wholesale energy market concerned, Article 2(2)(a)(ii) and (3)(a)(ii) of REMIT.

6. Transactions involving fictitious devices/deception - trading, or placing orders to trade, which employs fictitious devices or any other form of deception or contrivance, Article 2(2)(a)(iii) and (3)(a)(iii) of REMIT.

7. Dissemination of false and misleading information - giving out information that conveys a false or misleading impression about a wholesale energy product where the person doing this knows or ought to have known the information to be false or misleading, Article 2(2)(b) and (3)(b) of REMIT.

The ACER Guidance on the application of REMIT provides more detail of these types of conduct.